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Author Topic: Bitcoin adoption slowing; Coinbase + Bitpay is enough to make Bitcoin a fiat  (Read 66949 times)
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mgburks77
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April 06, 2014, 10:50:57 PM
 #141

also most big time crooks go to a lot of trouble and expense to launder money, which involve paying taxes plus added expenses
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April 06, 2014, 11:47:00 PM
Last edit: April 07, 2014, 09:53:27 AM by AnonyMint
 #142

Banks' technical capabilities might reach global reach (but I very much doubt that too), but they have an insurmountable problem. The governments are going to institute capital controls in order to trap wealth and tax it to death as the global economic implosion proceeds.

This is an extremist point of view, and for you to be right requires financial implosions, which has not happened yet and all things remaining as they are today, Banks will adapt.

Indeed, but I am correct on this one. See all my analysis and data in the Mad Max thread.

The velocity of money V has continued to collapse unabated since 2008. Remember M x V ≈ GDP

The $trillions of QE increases in M (money supply) drove the money to bonds in the developing world due to our ZIRP (too low of interest) to seek better returns, so now the developing world is short the dollar with huge dollar loans amongst the corporations which was used to overbuild condos and other uneconomic infrastructure.

The emerging markets peaked last year and the capital is now exiting and running back to the USA (there are still some diehards who haven't thrown in towel yet, but they will soon). The dollar and NYSE will go skyhigh and the developing world will fall into a spiraling abyss starting 2015. By end of 2015, this will choke off this deadcat bounce in the USA (which is really just international capital flows rushing in, not fundamentals).

All this did was raise the global debt from roughly $150 trillion in 2007 to $223 trillion now (note my figure is "total" debt and the linked article refers to government debt only). Global GDP is only $70 trillion. On top of that $1000+ trillion in derivative bets that sustain the financial system such as pensions. On top of that $1000+ trillion of unfunded social welfare promises from developed nation governments to their constituents.

This will start to crash after Sept 2015 according to Armstrong's computer model. His model has never been wrong. Have you seen all the correct predictions his computer model made. The reason his computer model can do that is because he put $100s of millions of data into it. He was pulling archives from the world's libraries of newspapers, ancient coins, etc.. The computer correlated all the repeating patterns and found out everything moves in cycles that are multiples of Pi = 3.1459. This sounds like nonsense but in fact it is reality!

Armstrong has high-level contacts that have always told him correct information (e.g. he predicted the Ukraine problem many months before anyone else was aware of anything because his computer was pointing him there and he had high level sources to corroborate). I have seen how they give him information that ends up correct. They have said the Fed will not do a QE again when the big crash comes. Instead the plan is to bail-in the deposits, meaning they are going to take all our money. This will be much worse than 2008. This is the big one coming. The Big Portabello Mushroom cloud.

I think Bitcoin is most valuable with some global financial chaos, but not too much because then you have war and Bitcoin won't survive real world war. I don't believe in a goldilocks view that we will see the perfect storm of financial chaos to drive Bitcoin adoption, but not so much that world war won't destroy the opportunity.

War will not likely shut down the internet, because the world's militaries depend on the internet and wouldn't function without it. You don't realize how the world economy would stop if they turned off the internet (even if they could, which I don't think they can). It is embedded in everything now. Turn off the internet, and the people will be in Wash D.C. with pitchforks. Also the government and military depend on the internet as the best data mining technology ever invented. And the HAM radio operators will have a rudimentary internet back up in a few days. Both iPhone and Android are adding mesh networking phone-to-phone over two-way WiFi. It will be impossible to turn off the internet, someone would have to go kill everyone who owns a smart phone. They can't take the internet away (the video is Eric Raymond) from us anymore, we already won that battle.

Bitcoin will not prosper as much as gold and the anonymous coins, because Bitcoin isn't anonymous and the G20 has already announced they will cooperate with the NSA to track down all wealth in all G20 nations. The citations are linked in this quote of myself:

[snip]

Since the Knowledge Age is rising [3], socialism is peaking into an economic collapse soon (maybe to rise even higher in future), thus we headed into a crazy period where the governments will try to fund the $150223 trillion global debt bubble [4] by hunting down all private capital (G20 announced a database for this today, NSA will contribute and note this is the bankster business model for them to own everything), then as Bitcoin is taken over top-down then the alternative coin with the above features will take over and become the surviving private sector. For this new virtual economy, e.g. downloaded 3D printing designs which we print at home instead of going to store (and 3D printers can print numerous materials on the same object), there are many cases that don't need the consumer protection charge backs. You won't likely be paying a high enough price for a download to justify the hassle of charging it back any way. A 7 billion person market is huge, prices will decrease while profits for individual designers will rise! Prosperity!

[snip]

 

And I see they have no prayer of supporting the volume of tiny micro payments any time soon (VISA only sales to 6000 txs per second now), nor getting significant penetration into all NICs emerging markets. Here where I am, if someone in the grocery lane is holding a card instead of cash, I run to the next queue because it adds about 5 minutes delay to the transaction.

While micro-payments are interesting, again i would say lets revisit this in 10 years when Bitcoin has viable solutions for the unplugged and unbanked. Bitcoin is 10 years from having a mainstream usable solution to any of this IMHO.

Bitcoin isn't going to make viable solutions.  We are going to need to. And we don't need 10 years. We just need the right set of features and implementation.

Do you realize that no Bitcoin mining client runs in the browser. How insane is that if you want mass adoption.

Do you remember I said I have experience creating million user markets in software and this was back when the internet was only 100 million users. I had 1% of the internet. My Coolpage.com went from 0 users at end of 1998 to 1 million users by 2001, only 2 - 3 years to capture 1% of the internet.

It is time for an expert to come in and do this correctly.

Also I don't assume we can't do transactions better than they can. We have to learn how to play to our decentralized advantage.

Maybe some day we'll "learn", but for now bitcoin is merely a speculative asset. Again I think any txn adoption curves and any talk about taking over global payment systems is not relevant to short term pricing.

True for Bitcoin. The adoption curve is set in stone already. Not necessarily true for an altcoin. It depends on features and implementation and quality of the community.


The ONLY thing driving short terms pricing is speculation. That is all. I think this will remain the case for at least 5 more years. The most you will see in value on speculation alone is 10k-50k because there will be other opportunities that represent a bigger return than Bitcoin after $10k.

Yup.

That only changes if bitcoin miraculously navigates the payment minefield and become a true alternative to the credit card, pay pal, and the coin or printed dollar.  

I do think it would be miraculous for Bitcoin to evolve its txn ecosystem fast enough to compete with a world that is already responding. How can a distributed organization compete with decisive actions of orgnanized actors in the existing txn world? Distributed systems are great for functioning without central authority but they are terrible at creating killer-app type strategies. You basically have to hope existing systems collapse for Bitcoin to have any chance of ever taking over as a mainstream transaction system.

I was writing about potential altcoins.

Correct there shouldn't be a foundation, rather a Benevolent Dictator for Life, otherwise nothing gets done efficiently. Besides the Foundation gets captured by the corrupt as you see with the Bitcoin Foundation. It is the power vacuum of politics again. See that Iron Law of Political Economics.

If you see an altcoin designed by committee, run as far away as you can. Rather you want to see a very fair and reasonable leader who accepts all beneficial input and developers, yet makes correct and firm decisions and explains them. Let's listen to Linus Torvalds. I'd love to see more modularity and less monolithicity so there are more leaders each with narrower scope. In this decentralized crypto-currency case, that can be in terms of building APIs, etc, so the altcoins don't put everything in their protocols to avoid making it top-heavy gridlock and brittle.

Note that with open source, the Benevolent Dictator can be overruled by consensus thus he must work to maintain consensus. It is a position of honor and you only keep it if you deserve to.

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April 07, 2014, 12:43:37 AM
 #143

http://esr.ibiblio.org/?p=5558&cpage=1#comment-481122

Quote from: AnonyMint a.k.a. whodat? a.k.a. Jocelyn a.k.a. JustSaying a.k.a. Shelby
Quote from: Christopher Smith
Decreased transactional friction leads directly to elimination of the opportunities for arbitrage. I can buy plenty of products and services directly from Shenzhen, and there’s no profit for a new middleman.

I assume your implied point is that as knowledge moves more freely then no one can build a Buffet-esque moat to defend profit. Your correct use of the term "middleman" goes to the heart of my counter-logic. Remember I wrote upthread that knowledge creation isn't fungible. So when you need something created based on an existing body of work, you need an expert. Let me distill that for you. As the transactional costs of knowledge sharing decreases, the profit moves closer to the producer of knowledge and away from the rent-seeking middlemen. Diversity of creation and the maximum division-of-labor guarantee that moat but where it is rightfully deserved personal property. People will finally own their expertise and creative energy.

Eric I continue to honor you. Peace.

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April 07, 2014, 04:02:06 AM
 #144

Living beings are non-equilibrium systems, so they have high exergy.

Schneider believes that the universal tendency towards equilibrium is driving evolution, that Nature is building more and more complex systems in order to erase exergy ever more efficiently. Living beings are only a cog in the machine built by Nature to destroy all exergy and achieve equilibrium. Life is only a way to break down concentrations of energy and turn it into diffuse waste heat. And we are an accidental by-product of such a universal process. Animals, for example, degrade the exergy of plants when they eat them. Furthermore, they do so in a way that is more efficient than other physical processes (burning the plant, for example, would radiate energy, while a cow eating grass radiates very little energy). In a sense, Nature created animals because they are the most efficient way to erase the exergy of plants, and it created plants because they are the most efficient way to erase the exergy of sunlight, and so on. Ecosystems have evolved from systems that emitted a lot of exergy to systems that emit little exergy. Metabolism is simply a way to degrade energy, and today's animals (such as mammals and birds) are a lot more efficient at it than the first forms of life. Evolution has been progressing towards more and more efficient systems to destroy exergy. Genetic information is simply information about how to destroy exergy.

The way I see it, the laws of thermodynamics are best for explaining inanimate things.  Of course systems want to remove gradients.  That is until life is created.  Life has a different law governing it.  Generally speaking, the point of life (at lower levels) is to make more life.  This is someways is explained well in The Selfish Gene.  It will do this by any means necessary and those means often mean creating gradients.  So life doesn't reduce gradients, it creates them.  So Schneider is not correct in my opinion saying we are accidental by products.  The original spark of life might have been an accidental by production of nature being so active, but once created, all the life that has followed has not been accidental, it has been created very purposely and that purpose is to make more life.  The thing that most organisms do well, the whole central point of their life cycles is making more life.  Some animals even die right after procreating because they no longer serve a purpose.  Evolution is a great system by which life can make sure it is always spreading. 

Along the way, life started giving traits to itself that helped it reproduce and continue.  This is what is driving evolution.  The need for life to continue on at all costs.  At many points along the way certain animals developed sexual reproduction and then eventually sexual selection of partners with good genes.  A peacock with big feathers showed great health and therefore was more likely to have its children live on.  A bull that was very large could only get that way with a healthy disposition so the biggest bull passes on its healthy genes to the next generation and so on.  But with human's something interesting happened.  We started sexual selection based on intelligence.  Females chose the smartest men as those men were best able to provide resources to help raise the children.  This caused a consciousness and intelligence explosion in human beings.  See https://ontherapyaspse.files.wordpress.com/2012/04/geoffrey-miller-the-mating-mind.pdf

With intelligence and consciousness, human beings have far more resources and if making gradients helps serve their purpose, they can do it, if destroying gradients helps their purpose, they can do it.  But the purpose is no longer limited to just reproducing life.  A conscious being can choose (they it maybe hard for many) to have a different purpose.  Intelligence and consciousness are complete game changers. 

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April 07, 2014, 04:25:31 AM
 #145

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I have seen how they give him information that ends up correct. They have said the Fed will not do a QE again when the big crash comes. Instead the plan is to bail-in the deposits, meaning they are going to take all our money. This will be much worse than 2008. This is the big one coming. The Big Portabello Mushroom cloud.

A question about this.  Most wealth is stored - in my opinion - not in $$'s in the bank.  But in property and businesses that generate $'s.  Are you talking about robbing bank accounts.  Or bumping taxes up to 70%?

They could rob my bank account and I'd shrug.  If they took my two rent houses - I'd be hosed.

Quote
All this did was raise the global debt from roughly $150 trillion in 2007 to $223 trillion now (note my figure is "total" debt and the linked article refers to government debt only). Global GDP is only $70 trillion. On top of that $1000+ trillion in derivative bets that sustain the financial system such as pensions. On top of that $1000+ trillion of unfunded social welfare promises from developed nation governments to their constituents.

Do you have any sources for the derivative bets & social welfare estimates?
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April 07, 2014, 04:25:43 AM
 #146

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The way I see it, the laws of thermodynamics are best for explaining inanimate things.  Of course systems want to remove gradients.  That is until life is created.  Life has a different law governing it.

Matter, energy, and spacetime are all governed by the same physical laws. Life is a combination of the three acting in accordance to those physical laws.

Quote
With intelligence and consciousness, human beings have far more resources and if making gradients helps serve their purpose, they can do it, if destroying gradients helps their purpose, they can do it.  But the purpose is no longer limited to just reproducing life.  A conscious being can choose (they it maybe hard for many) to have a different purpose.  Intelligence and consciousness are complete game changers.  

No, they aren't. Life is a chemical reaction occurring on the surface of this planet and it's function is to degrade energy differentials. Read the article I posted. Consciousness and intelligence is simply a more efficient way of doing this.

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April 07, 2014, 04:32:22 AM
 #147

On the issue of a CPU coin.  I've been digesting litecoins move from GPU's to ASICs.  A lot of the GPU guys cry foul.  Diehard miners feel it's going to be great as they are looking at profit from the initial release.  But my instincts tell me - the profit made from ASICs are not going to previous individual GPU miners at all.  Even if the companies who sell the hardware don't create farms - there is too much opportunity for someone to bankroll the production of thousands of ASIC chips.  I don't see how to keep the distribution decentralized with ASICs.

On the issue of CPU mining.  I don't see how to avoid centralization as well.  Botnets and massive cloud computing power seem to me like they would be taking the lions share of the distribution.

PoS just makes no sense to me.  Give more to the wealthier?  

Ethereum team mentioned something about forcing each of the miners to keep a copy of the blockchain on their hard drive to avoid pools all together.  Essentially even with GPU mining the network is only partially secured when the blockchain isn't downloaded.  If you assume the miners are functioning as nodes - when in reality the pools are the only nodes.

I'm just having a tough time seeing a good solution for mining to avoid centralization.  
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April 07, 2014, 04:48:44 AM
Last edit: April 07, 2014, 07:43:04 AM by vokain
 #148

Another reason that transaction fees don't work.

I finally had a spare moment to contemplate the variables.

A key factor is the block size. If the block size is unlimited (and bandwidth is an insignificant cost), then unless miners have a monopoly they will accept transactions with fees as low as don't constitute a DoS attack, in order to maximize revenue.

In other words, they would have no pricing power at all (a Tragedy of the Commons) and the system would devolve into a partial-monopoly in order to gain pricing power.

A partial-monopoly in this case is enough % of the network hashrate to delay transactions (by that % of blocks) which do not include a sufficient fee.

If we limit block size, then the system doesn't scale.

If we let the Bitcoin foundation decide when to increase block size, then they control the economic market function, i.e. we've centralized Bitcoin.

Let us assume unlimited block size and partial-monopolies. Thus the transaction fee can always be forced higher in order to generate more revenue for the miners. Thus Bitcoin devolves (as coin rewards diminish) to a system that presents spenders with a choice between include a very high transaction fee or accept an ever increasing delay for confirmation. This will exacerbate as coin rewards diminish and volume of transactions increase.

If we instead assume limited block size, then the Bitcoin foundation will set the transaction fees, not the market.

Bitcoin is a broken design.

So, going from what you're saying, if the blocksize was unlimited as to increase bandwidth (as opposed to the artificially-imposed 1MB block-size limit), a reliable anti-trust mechanism/protocol would have to be in place to prevent collusion, nefarious or accidental. It seems to me that miners lack a check on their power, at least as of present in the current crop of cryptocurrencies. Currently, the only possible solution seems to be forking the chain, but without a fundamental anti-trust check, that does nothing to prevent future intra-blockchain monopolies and weakens stability.

So, how to check against the ability of mining monopolies to delay/reject transactions of their choosing:
if they're artificially raising the costs of transactions through monopoly power?
if they're targeting/censoring transactions by means of blacklists (for instance, MasterProtocol, Counter-Party, ColoredCoins)?

Does this mean that we have to scale the ability of small miners to be as relevant in proving a block as a monopoly is, am I thinking in the right direction here? It seems that solo miners in the Bitcoin mining scene though probably have just as good a chance of profiting if not better through lack of pool fees (tradeoff: variance increases the smaller the % a miner is of the total hashrate), consequently in a democratic setting, they have as much power as a minority does in any given democracy, which is almost none (though they may have voice).

Instead of the gamble for one entity to receive the one block reward which allocates disproportional power to leading pool operators, how can the nature of the block reward be changed to promote decentralized mining as opposed to the centralization that the current schema promotes?

I apologize for any immaturity of these musings, I just wanted to get these questions out so as to flesh out the details with you all.
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April 07, 2014, 04:51:02 AM
Last edit: April 07, 2014, 06:08:26 AM by mgburks77
 #149

Quote
A question about this.  Most wealth is stored - in my opinion - not in $$'s in the bank.  But in property and businesses that generate $'s.  Are you talking about robbing bank accounts.  Or bumping taxes up to 70%?

First raising taxes and then when that well runs dry, a nice haircut ala Greece or Cyprus. Otherwise known as bail-ins

Quote
Do you have any sources for the derivative bets & social welfare estimates?
http://www.imf.org/external/pubs/ft/sdn/2012/sdn1212.pdf


Didn't figure a source for all G20 nations but the US has 128 trillion in unfunded liabilities itself :
http://www.washingtonpost.com/blogs/fact-checker/wp/2013/10/23/does-the-united-states-have-128-trillion-in-unfunded-liabilities/
Most of the G20 nations have a lot more social spending than the US so the figure doesn't seem impossible. I've seen it sourced before but don't have time to look more tonight.

Bonus info about IMF shell game:
http://www.citizen.org/Page.aspx?pid=3748
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April 07, 2014, 05:55:55 AM
 #150

Awesome - ty for the sources.
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April 07, 2014, 07:17:24 AM
 #151

Matter, energy, and spacetime are all governed by the same physical laws. Life is a combination of the three acting in accordance to those physical laws.

I agree with you that this is the prevailing current theory.  I just think that in 50 years we will have an upgraded and different understanding of matter, energy, space time, and how life and consciousness play into these.  I know that is a weak argument in that I can't refute you with science.  I'm basically arguing the ridiculous point of "my imaginary science is better than your real science." It is just my gut feeling and gut feelings don't count for much in a forum like this.  So, I'll give it to you that you made the superior comment and I'll be left twiddling my thumbs hoping someday science upgrades proves me right.  Hahaha.  

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April 07, 2014, 07:46:14 AM
 #152

I'll try to explain myself and further my argument a little so that I just don't look so silly.  In my belief, I think consciousness is not bound by the rules of space, time, energy and matter as we currently understand them today (although how we understand them in the future might be different).  Here is just one way of looking at it so that I am not completely silly (though still maybe a bit silly. hahaha)  Even though science says what I am saying is absurd, I think the concept has been with every culture going back to prehistory.  I gather that millions of people over thousands of years have reported having spiritual, religious, psychic, or otherwise paranormal experiences that would completely break physics as we know today.  For me to be right, only just one of those experiences of millions needs to be true and based on something that isn't yet understood.  For science of today to be right, all of them must be false 100% of the time.  I understand that 1000 people can be wrong, or even 999,999,999 can be wrong, but I only need that one in a million to be right.  At that point, we just need to upgrade science to include it.  I am basically siding with thousands of years of tradition of people saying weird things happened with their consciousness than the science of today.  

Anyway, sorry to derail the conversation away from bitcoin. And it is kind of pointless to defend my position anymore as I've already stated I am taking the gamblers position.   Wink

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April 07, 2014, 08:42:54 AM
Last edit: April 07, 2014, 11:09:55 AM by AnonyMint
 #153

Generally speaking, the point of life (at lower levels) is to make more life.  This is someways is explained well in The Selfish Gene.  It will do this by any means necessary and those means often mean creating gradients.  So life doesn't reduce gradients, it creates them.

Maximizing entropy (disorder) is the maximization of the number of equiprobable outcomes, i.e. maximizing degrees-of-freedom. Btw, degrees-of-freedom is potential energy. Creating more unique (every human is!) instances life increases diversity, granularity, and degrees-of-freedom. Procreation is breaking down the concentrated gradient (order a.k.a. kinetic or thermodynamic energy) incoming from the Sun into maximum entropy or potential energy.

I got into this in the Information Is Alive! and The Universe essays at my blog (see my signature).

Schneider is semantically incomplete though on one point. jabo38 is correct, the goal of life is to maximize the instances life, yet life goes hand-in-hand with death because if nothing dies then procreation rate has to diminish or let's say the inertia grows greater than the possible forward change. So in that sense Schneider is correct as quoted.

That was appreciated but let's not discuss that philosophical tangent further in this thread, so we don't bury the main point of this thread. We've already built a sufficient case for the point w.r.t. to stated goals for crypto-currency. I strongly urge to move further discussion on that to the Dark Enlightenment or Economic Devastation thread. I will copy this post there. You can click "Quote" then copy+paste into a Reply at any thread.

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April 07, 2014, 09:07:51 AM
 #154

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A question about this.  Most wealth is stored - in my opinion - not in $$'s in the bank.  But in property and businesses that generate $'s.  Are you talking about robbing bank accounts.  Or bumping taxes up to 70%?

First raising taxes and then when that well runs dry, a nice haircut ala Greece or Cyprus. Otherwise known as bail-ins



And the most painfull of taxes is the land tax, where you are taxed only in terms of property size, regardless of income. So in a recession where most shops close down and shop owners see their income going to zero they are called to pay more taxes. This is the Confiscation mechanics on property
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April 07, 2014, 09:09:07 AM
Last edit: April 07, 2014, 09:47:21 AM by AnonyMint
 #155

Let's discuss about Mastercoin tomorrow. I need to sleep first.

Someone asked me to comment about Mastercoin.

Yes we need smart contract type features in crypto-currency.

I expect this post will cause the "No" votes to increase significantly, because many are putting their hopes in Mastercoin, Ethereum, and BitShares (ProtoShares).

And in my technical opinion no Mastercoin is not it:

http://wiki.mastercoin.org/index.php/FAQ#Why_are_there_only_SELL_orders.2C_but_no_BUY_orders

http://wiki.mastercoin.org/index.php/Myths#Misconception:_.22Some_of_the_advanced_features_of_the_Master_Protocol_are_not_technically_.2 F_economically_feasible.2C_specifically_the_Escrow-Based_Currencies.22

http://www.reddit.com/r/Bitcoin/comments/1rpx26/mastercoin_is_a_joke/

https://bitcointalk.org/index.php?topic=283129.0

I don't believe the concept BitUSD in Bitshares will work as expected. I don't believe Ethereum will avoid being adversely impacted (if not destroyed) by a virus on its block chain. It is very dangerous to put a Turing complete state machine on the block chain. Even a finite state machine is dangerous because the multiplicity of states interact in ways that are difficult to enumerate in advance in the design stage. I haven't been following Ethereum closely for past month or two, so I don't know if they've done any significant re-design. I know Ethereum is using fees to hopefully control denial-of-service and runtime. That isn't related to the concern I am expressing herein.

I have some ideas about how to do this correctly, but this is not the right time to get into it. Too busy on other more urgent details for the time being.

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April 07, 2014, 09:38:42 AM
 #156

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I have seen how they give him information that ends up correct. They have said the Fed will not do a QE again when the big crash comes. Instead the plan is to bail-in the deposits, meaning they are going to take all our money. This will be much worse than 2008. This is the big one coming. The Big Portabello Mushroom cloud.

A question about this.  Most wealth is stored - in my opinion - not in $$'s in the bank.  But in property and businesses that generate $'s.  Are you talking about robbing bank accounts.  Or bumping taxes up to 70%?

They could rob my bank account and I'd shrug.  If they took my two rent houses - I'd be hosed.

All of the above. The foreigners have been trying to hide their capital in USA real estate and the G20 is going to cooperate on tracking it all down. Property taxes are going to skyrocket because all the municipalities are going to be bankrupt and also the pension plans. Detroit and Greece are dry runs for what is coming every where in the developed world, including even Germany where are majority of municipalities are bankrupt on an accurate accounting. This all comes from Martin Armstrong. You can find the citations on his blog if you read a few months worth of posts.

If I were you, I would do some research into whether you should sell (before Sept 2015) into this ongoing dead cat bounce in the USA. I can't advise you because everyone's circumstance is unique, i.e. location, etc.

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All this did was raise the global debt from roughly $150 trillion in 2007 to $223 trillion now (note my figure is "total" debt and the linked article refers to government debt only). Global GDP is only $70 trillion. On top of that $1000+ trillion in derivative bets that sustain the financial system such as pensions. On top of that $1000+ trillion of unfunded social welfare promises from developed nation governments to their constituents.

Do you have any sources for the derivative bets & social welfare estimates?

I had seen multiple estimates on the derivatives ranging from $300 trillion to a $quadrillion from 2007 to 2010, then I stopped tracking it. Google can surely help you.

The estimate of unfunded social liabilities is my own (out of my arse wild) guesstimate based on some reliable numbers I had seen from David M. Walker (former comptroller of the GAO) of $150 trillion for the USA alone and I am sure it is much worse in Europe as they are more socialist. You can Google on him to confirm.

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AnonyMint
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April 07, 2014, 10:28:36 AM
 #157

On the issue of a CPU coin.  I've been digesting litecoins move from GPU's to ASICs.  A lot of the GPU guys cry foul.  Diehard miners feel it's going to be great as they are looking at profit from the initial release.  But my instincts tell me - the profit made from ASICs are not going to previous individual GPU miners at all.  Even if the companies who sell the hardware don't create farms - there is too much opportunity for someone to bankroll the production of thousands of ASIC chips.  I don't see how to keep the distribution decentralized with ASICs.

A significant weakness of ASICs is they can't be repurposed. They are bricks without mining your specific coin (or if a new generation of chips come out). See the following two posts for one reason that is a potentially very big problem w.r.t. to electricity consumption for Bitcoin:

https://bitcointalk.org/index.php?topic=520977.msg6053844#msg6053844
https://bitcointalk.org/index.php?topic=520977.msg6061770#msg6061770

Also ASICs can't be purchased any where. The goal for mining should be that anyone can get coins by converting their fiat to computer hardware. This makes the computer a form of non-divisible, yet fungible proxy for cash. Since the government is phasing out cash, I find that to be very important.

On the issue of CPU mining.  I don't see how to avoid centralization as well.  Botnets and massive cloud computing power seem to me like they would be taking the lions share of the distribution.

Now I will drop a bombshell insight that I had been keeping secret.

If the cpu coin is widespread enough to drive sufficient demand, the price of Botnets will simply rise to match their hardware cost. They aren't unlimited in supply. Botnets compete for the same computers that users will want to use to mine with. No problem really if thinking big, only while small it is a threat.

Cloud computing won't have too much of an advantage, only the economies-of-scale on electricity mostly, but the wise small-scale miner can locate with microhydropower to beat them and the home miner doesn't care about electricity cost. The Tilera CPUs won't compete. If you mean admins hijacking their company servers to use their downtime, this is just a form of Botnet.

Also the word will get out. People will start reclaiming their computers from hijackers. Thus driving the price of Botnets up further.

In the near-term, the botnets won't have the right CPUs in most machines, so they will run inefficiently, something like an order-of-magnitude less than a recent Haswell.

Also the value of the coin scales to the value of the mining network, so if home users drive difficulty to the moon (because the electricity cost isn't significant compared to other appliances), they will also drive the price of the coin to the moon.

PoS just makes no sense to me.  Give more to the wealthier?

And several others reasons it doesn't make sense.

Ethereum team mentioned something about forcing each of the miners to keep a copy of the blockchain on their hard drive to avoid pools all together.

[snip]

I'm just having a tough time seeing a good solution for mining to avoid centralization.  

I know the solution.  Lips sealed

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April 07, 2014, 10:43:26 AM
Last edit: April 07, 2014, 11:32:38 AM by AnonyMint
 #158

Another reason that transaction fees don't work.

I finally had a spare moment to contemplate the variables.

A key factor is the block size. If the block size is unlimited (and bandwidth is an insignificant cost), then unless miners have a monopoly they will accept transactions with fees as low as don't constitute a DoS attack, in order to maximize revenue.

In other words, they would have no pricing power at all (a Tragedy of the Commons) and the system would devolve into a partial-monopoly in order to gain pricing power.

A partial-monopoly in this case is enough % of the network hashrate to delay transactions (by that % of blocks) which do not include a sufficient fee.

If we limit block size, then the system doesn't scale.

If we let the Bitcoin foundation decide when to increase block size, then they control the economic market function, i.e. we've centralized Bitcoin.

Let us assume unlimited block size and partial-monopolies. Thus the transaction fee can always be forced higher in order to generate more revenue for the miners. Thus Bitcoin devolves (as coin rewards diminish) to a system that presents spenders with a choice between include a very high transaction fee or accept an ever increasing delay for confirmation. This will exacerbate as coin rewards diminish and volume of transactions increase.

If we instead assume limited block size, then the Bitcoin foundation will set the transaction fees, not the market.

Bitcoin is a broken design.

So, going from what you're saying, if the blocksize was unlimited as to increase bandwidth (as opposed to the artificially-imposed 1MB block-size limit), a reliable anti-trust mechanism/protocol would have to be in place to prevent collusion, nefarious or accidental.

I'm making the claim that the miners would be forced to collude else transaction fees would trend down until they equal miners' costs under competition, because there would be no limitation on slots per block for transactions to compete for.

It seems to me that miners lack a check on their power, at least as of present in the current crop of cryptocurrencies. Currently, the only possible solution seems to be forking the chain, but without a fundamental anti-trust check, that does nothing to prevent future intra-blockchain monopolies and weakens stability.

Agreed but that is orthogonal to my point. My point is that transaction fees force either the miners to collude or the Bitcoin developers to control the network with block size to set a desirable transaction rate. The latter gives the Bitcoin developers too much power.

Transactions fees turn off the free market. I propose to fix it by saying an altcoin should make transaction fees 0, fund mining from perpetual new coins, and control transaction spam another way (which I know how to do).

Upthread I explained in great detail why perpetual debasement (new coins) is very desirable from every possible consideration. Goldbugs need to read my explanation so they can break out of their incorrect macroeconomic understanding.

Also I thought of another attack possible due to transactions fees (but most didn't agree and I believe they couldn't understand my point).

So, how to check against the ability of mining monopolies to delay/reject transactions of their choosing:
if they're artificially raising the costs of transactions through monopoly power?
if they're targeting/censoring transactions by means of blacklists (for instance, MasterProtocol, Counter-Party, ColoredCoins)?

I know how to do this.  Lips sealed

Cpu-only is one aspect, and the other is controlling the sizes of the pools.

Does this mean that we have to scale the ability of small miners to be as relevant in proving a block as a monopoly is, am I thinking in the right direction here?

Yup, but we can't eliminate pools. Can you imagine a smaller miner earning a coin every 6 months (e.g. when the coin is worth $10,000). Instead the pool helps the small miner earn 1/180th of a coin every day.

We also need pools because it is the only way to control orphan rate and get sub-1 minute transaction speed. Also we need pools for another very important reason.  Lips sealed

It seems that solo miners in the Bitcoin mining scene though probably have just as good a chance of profiting if not better through lack of pool fees (tradeoff: variance increases the smaller the % a miner is of the total hashrate), consequently in a democratic setting, they have as much power as a minority does in any given democracy, which is almost none (though they may have voice).

We must have pools.

Instead of the gamble for one entity to receive the one block reward which allocates disproportional power to leading pool operators, how can the nature of the block reward be changed to promote decentralized mining as opposed to the centralization that the current schema promotes?

Make transaction fees 0, fund from perpetual debasement, and contemplate a design to prevent pools from growing too large.

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April 07, 2014, 10:52:48 AM
 #159

I wonder what effect could a CPU coin have if it has too much value in the CPU industry, are we to expect Intel and AMD for example to withhold fresher iterations of their CPUs for private mining, or charge much higher, or the opposite way getting preorders that will fund their research at a faster rate?

Any chance that your coin works with a UltraSPARC T2 chip?
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April 07, 2014, 10:56:30 AM
Last edit: April 07, 2014, 11:12:17 AM by AnonyMint
 #160

I wonder what effect could a CPU coin have if it has too much value in the CPU industry, are we to expect Intel and AMD for example to withhold fresher iterations of their CPUs for private mining, or charge much higher, or the opposite way getting preorders that will fund their research at a faster rate?

If ever the coin has that much power, the coin can buyout Intel. I mean the home miners can all go buy Intel stock and vote for change in Directors.

If we get to that point, we already won. There would be so much social change already.

I don't think I am omniscient enough to predict all of the possible scenarios. Radical change is enough for me. Let's see where society takes it.

Any chance that your coin works with a UltraSPARC T2 chip?

AnonyMint has not and will not announce nor endorse a coin.

I have contemplated designs and for a properly designed cpu-only coin, no I don't think a T2 nor Tilera would have a per hardware $ nor per operational Watt advantage and in fact would be worse.

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